Filing a fire insurance claim? Be aware of these 10 reasons it could be rejected for.

Being aware of the reasons that can lead to your fire insurance claim being denied can help avoid unfortunate surprises later. Read on to find out the 10 most common reasons you clam could be rejected for.

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Fire and natural perils like flood, storm, and cyclone are among the most damaging incidents that one can face. The immediate loss is a big hit in itself and recovering from the consequential losses can be daunting as well. Rebuilding it all can take years,

This is why you should get the safety provided by a Standard Fire and Special Perils Policy. It offers comprehensive coverage to all your properties and provides financial support to recover from unforeseen losses.

That said, the moment of truth for any insurance policy is when you file a claim. To avoid any unfortunate surprises, it is important that you familiarize yourself with what your policy covers, and what it does not.

Towards this, here are a few typical reasons for which a claim may be considered non-admissible by your insurer:

1. Natural weathering

Any superficial and gradual cracks over a period that develop because of natural weathering of your property are not admissible as damages for an insurance claim.

2. Improper plumbing

As the property owner, it is your responsibility to take reasonable care of your property. As such, an insurer would not admit claims that arise from internal seepage caused by defective plumbing known to Insured.

3. The normal cracking, settlement, and bedding down of new structures due to subsidence

New buildings and structures can sometimes crack early on in their life simply because of bedding down and unequal load distribution on newly constructed foundations. This could also happen due to improper compacting of the underlying soil. Any such damage is not covered by a Standard Fire and Special Perils policy.

4. Defective design or workmanship

Any loss or damage to your property that is caused directly by subsidence due to defective design or workmanship or the use of defective materials will not be admitted as a claim under your insurance policy.

5. Contents

While the structure of your building is covered by your Standard Fire and Special Perils policy, the contents of the building still need to be covered separately.

6. Disposition

Permanent or temporary dispossession resulting destruction by order of the Government Authority.

7 Burglary, housebreaking and theft

Burglary, housebreaking, and theft are not covered under the policy. Please remember that any loss by theft during or after a loss event covered will also not be admissible as a claim, other than as provided for under Riot, Strike, Malicious and Terrorism Damage cover.

8. No insurable interest

The insurance policy is automatically terminated if the policyholder’s interest in the property passes from the Insured otherwise than by will or operation of law. In other words, if the loss event does not financially impact you – you cannot file a claim when that event occurs.

9. Electrical or mechanical breakdown

In case a piece of machinery suffers loss, destruction, or damage due to electrical breakdown or mechanical breakdown but does not result in a fire – the damage to the machinery itself is not covered under this policy. The breakdown could be a result of over-running, excessive pressure, short-circuiting, arcing, self-heating or leakage of electricity.

10. Not taking preventive measures

After a loss event occurs, you are expected to take reasonable precautions to limit the loss or damage to the insured property. Your claim may be denied if the property is left exposed to additional loss and reasonable steps are not taken to reduce the extent of the loss.

Other than the reasons listed above, your claim will also be denied if you miss paying your premium. Remember that not paying your premium on time can cause the policy to lapse, and in such a case you will be extended no coverage at all.

Tips to avoid claim denial

To ensure that your claims are processed in a timely fashion, you should:

  1. Notify your insurer of the loss event as soon as practically possible.
  2. Pay your policy premiums on time.
  3. Make sure that the insurer is informed of any modifications done to the property insured.
  4. Read the policy terms and conditions closely and be aware of what is covered and what is not.
  5. After a loss event, take all possible steps to limit the damage and avoid further loss.
  6. Document all the damage and file a detailed itemized claim.

You should also ensure that you have got your property ensured for the correct Sum Insured. If the Sum Insured is found to be less than the amount required to be insured, the amount payable in case of a loss event will be reduced in the same proportion as the Sum Insured being an under insurance property.

To put it in simple terms, your if your property is 20% underinsured whatever is your claim assessment amount the same will be reduced by 20% before payment.

When buying an insurance policy, it is essential that you familiarize yourself with the exclusions under the same. This allows you to make an informed decision about whether you would want to expand the coverage through add-ons to meet your particular requirements.

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